HKSAR v. LI MAN KIN

DCCC 1427/2024

[2026] HKDC 1797

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1427 OF 2024

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REASONS FOR SENTENCE

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1.  Mr Li pleaded guilty before me to 4 charges of Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455.

2.  Particulars of Offence are that he, between A and B, both dates inclusive, in Hong Kong, together with other person(s)  unknown, knowing or having reasonable grounds to believe that property, namely a total sum of C in the bank account with Standard Chartered Bank (Hong Kong)  Limited, account number N, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

3.  For Charge 1, A is 9 November 2020; B is 2 August 2021; C is $153,199,114.72 Hong Kong currency; N is 574-1-198024-3.

4.  For Charge 2, A is 9 November 2020; B is 2 August 2021; C is $309,062,511 Hong Kong currency; N is 574-0-064763-7.

5.  For Charge 3, A is 2 February 2021; B is 21 October 2021; C is $1,063,194.01 Hong Kong currency; N is 574-1-198927-5.

6.  For Charge 4, A is 2 February 2021; B is 21 October 2021; C is $807,152.28 United States currency; N is 574-1-198931-3.

Facts admitted by Mr Li

7.  Hanyip Limited (“HL”)  was a business company registered in BVI.  It had 3 bank accounts with the Standard Chartered Bank (Hong Kong)  Limited (“SCB”), namely the Charge 1 account (a Savings account), the Charge 2 account (a Current account), and a FX account numbered 574-1-198028-6.

8.  The HL bank accounts were opened on 9 November 2020 on the application of Mr Li.  An e-banking password was sent to an email address provided by Mr Li.  According to the opening mandate, Mr Li declared to be the director of HL.  A Letter of No Consent was issued against the Charge 1 account and Charge 2 account on 2 August 2021.

9.  Geling Trading Company Limited (“GTL”)  was a Hong Kong private limited company.  It had 2 bank accounts (both Savings accounts)  with SCB, namely the Charge 3 HKD account and the Charge 4 USD account.

10.  The GTL bank accounts were opened on 2 February 2021 on the application of Mr Li; the accounts were closed on 21 October 2021.  According to the opening mandate, Mr Li declared to be the director of GTL.  According to the Company Registry records, Mr Li was the sole director of GTL as of the date of GTL’s incorporation ie 25 January 2021.  Li Xinghua replaced Mr Li as the director on 11 March 2021.

11.  Mr Li was all along the sole signatory and sole account holder of the HL bank accounts and GTL bank accounts.

Charge 1

12.  Between 9 November 2020 and 2 August 2021, to the Charge 1 account, there were 25 deposits and 8 instances of interest credit (latter totalling $582.79)  with the total amount of $153,199,114.72.

13.  During the same period, from the Charge 1 account, there were 4 transfer withdrawals totalling $127,500,000.

Charge 2

14.  Between 9 November 2020 and 2 August 2021, to the Charge 2 account, there were 54 deposits totalling $309,062,511.

15.  During the same period, from the Charge 2 account, there were 3 transfer withdrawals totalling $162,500,000.

Charge 3

16.  Between 2 February 2021 and 21 October 2021, to the Charge 3 account, there were 3 deposits totalling $1,063,194.01.

17.  During the same period, from the Charge 3 account, there were 2 transfer withdrawals totalling $1,061,944.01.

Charge 4

18.  Between 2 February 2021 and 21 October 2021, there was a total deposit of USD807,152.28 into the Charge 4 account and a total withdrawal of the same amount of USD from the same account.

Tax and TIC records

19.  None of HL, GTL and Mr Li filed any tax return for the financial years 2018/2019, 2019/2020, and 2020/2021.

20.  An entity known as Goodwill Logistics Company filed a Notification to the Inland Revenue Department showing that subcontracting fees of $94,500 were paid to Mr Li for the financial year 2018/2019.

21.  Mr Li was in Hong Kong throughout the charge periods of Charges 1-4.

Arrest

22.  Mr Li was arrested on 29 May 2024.

23.  On 19 June 2024, during a cautioned VRI, Mr Li stated the following:

Concerning his personal background

(a)  He worked as a self-employed driver between 2000 and 2023 and earned $800-$1,000 a day;

Concerning the GTL bank accounts

(b)  He was in need of money; his friend introduced him to “Ah Kin” whom he helped to open a company account in return for cash of $2,000;

(c)  Two to three days before opening the GTL bank accounts, he passed his HKID card and some information to Ah Kin;

(d)  On the day of opening the GTL bank accounts, Ah Kin passed some documents to him for signing; afterwards, he took those documents to SCB to open the GTL bank accounts;

(e)  He recognized his signatures on the opening mandate of the GTL bank accounts; and

(f)  He did not know Li Xinghua who replaced him as the director of GTL.

Admission

24.  Mr Li now admits the particulars of Charges 1 - 4.

Criminal record

25.  Mr Li has 25 previous convictions none similar.

Antecedents

26.  Mr Li is aged 50 (44-45 at the time of the offences), educated to F2 level, unemployed.  Mr Li was living with his girlfriend in private housing in Sham Shui Po.

Mitigation

27.  Ms Mandy Wong of counsel assigned by the Director of Legal Aid mitigated on behalf of Mr Li.  The following is a summary of the mitigation submissions.

28.  Mr Li is a divorcee with two grown-up children; both of them live with his ex-wife.

29.  Mr Li previously worked as a lorry driver.  However, his employment was cut short by the COVID pandemic and he experienced financial difficulties.  Out of desperation and foolishness, he committed the present offences for quick money.

30.  Mr Li suffers from diabetes and requires daily injections and medication.  He attends regular follow-up medical appointments while in custody.

31.  Mr Li indicated his guilty pleas at the earliest opportunity or as early as possible and no time was wasted.

32.  Mr Li made frank admissions relating to Charges 3 and 4.

33.  There is no evidence of the predicate offence, nor is there evidence that Mr Li had knowledge of, or was involved in, the predicate offence.

34.  Mr Li merely played the role of a stooge or money mule.  He was not the mastermind behind the entire money laundering scheme; he did not recruit others to participate in the operation of the scheme.

35.  It is admitted by Ms Wong on behalf of Mr Li that under Charge 1, the wire transfer withdrawal of $42,500,000 was to a Singaporean account; that under Charge 2, the two wire transfer withdrawals totalling $127,500,000 were to Singaporean account(s).  Other than these withdrawals, there was no evidence of international dimension.

36.  Mr Li has previous convictions for 25 charges, none of which related to money laundering.  Ms Wong urged the court not to enhance the sentence on this basis.

37.  Ms Wong acknowledged the case of Secretary for Justice v Xie Zhijian, CAAR 4/2024, and took no issue with the actus reus of “dealing” underlying the four charges.

38.  This is a typical case of money laundering by way of stooge bank accounts.

39.  There are no rigid sentencing guideline for money laundering cases; as the Court of Appeal has reiterated that the facts are highly variable, making it difficult and undesirable to offer guidelines.

40.  However, the Court of Appeal has laid down several prominent case authorities that provided guidance on sentencing.  Ms Wong drew my attention to the following case authorities, which set out the factors to be considered when determining the sentence starting point.

41.  In the case of HKSAR v Boma [2012] 2 HKLRD 33, at para 38, the Court of Appeal emphasized that “the question of the amount of money laundered … is not the be-all and end-all of a case but is a significant feature”.

42.  The Court of Appeal further identified in para 40, the following significant features that should be taken into account when sentencing money laundering cases:

(1)  The nature of the predicate offence for generating “black money” and the sentence to be imposed;

(2)  The state of the offender’s knowledge;

(3)  Where the operation involved an international dimension, this would be a significant aggravating feature;

(4)  The sophistication of the offence, including the degree of planning;

(5)  Where the offence was committed by or on behalf of an organized criminal syndicate, this would be an aggravating feature;

(6)  Whether there was one transaction or many, and the length of time over which the offence was committed;

(7)  Whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved;

(8)  The role of the offender and the acts performed by him.

43.  In Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, the Court of Appeal, at paras 13 & 14, pointed out that the sentence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others; other factors relevant to sentencing included the number of offences, the duration, the degree to which the defendant participated in the offence involving “black money” and whether or not it was an organized and sophisticated crime etc.

44.  In para 15 of Wan Kwok Keung, Yeung JA (as Yeung VP then was)  observed that:

“15. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money laundering” cases. The sentencing starting point is 3 years or so where the “black money” involved is between $1 million and $2 million; 4 years or so where it is between $3 million and $6 million; and could be over 5 years where it is above $10 million.”

45.  In the Court of Appeal case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, at para 9, Cheung JA stated:

“9. There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However the following factors are to be taken into account when determining sentence:

(a)  It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(b)  The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the “money laundering” activities are relevant factors to be considered.

(c)  The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(d)  If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(e)  The length of time the offence lasted.”

46.  The total amount of money being subject of the four charges is about $469,620,607.  There were 4 bank accounts involved; each of the four offences spanned slightly less than 9 months, with some overlapping periods.

47.  Mr Li’s role as a stooge places his culpability to rank towards the lower end of the “gradations of culpability” mentioned in Boma.

48.  The scheme was not very sophisticated.  It did not involve multiple tiers of bank accounts, forming layers of “shields” to increase the complexity of police investigations.

49.  In this case, the predicate offence has not been identified.  There was no suggestion of involvement of an organized criminal syndicate.

50.  Charge 1 involved 33 deposits.  Charge 2 involved 54 deposits.  Charge 3 involved 3 deposits.  Charge 4 involved about 24 deposits.  Compared with cases of a similar nature, the number of deposit transactions in each bank account may be regarded as not being of the most serious kind.

51.  In HKSAR v Kam Susanto[1], CACC 542/2003, the applicant was convicted after trial on one count of bookmaking and one count of money laundering, involving $471,619,279.  The applicant was sentenced to a total of 4.5 years’ imprisonment.

52.  In Secretary for Justice v Xie Zhijian, CAAR 4/2024, the Court of Appeal pointed out that, in dealing with money laundering sentencing, the judge should consider, on the one hand, the maximum sentence for this type of offence and the need for deterrent sentence, and on the other hand, the facts of the case and his overall impression of the case; the judge should not merely rely on the appropriate sentencing bracket for the amount of money laundered.

53.  Ms Wong submits that the overall culpability of Mr Li should remain the most important factor in determining the suitable final sentence.

54.  Ms Wong reminded the court to apply the full 1/3 sentencing discount for plea before consideration of enhancement of sentence under OSCO, Cap 455.

55.  Ms Wong does not object to the prosecution asking for the said enhancement.  She suggested that the comment in CIP Li Yiu Nam’s statement dated 24 August 2026 that “[someone who] had assisted in the money laundering activities but has minimal or no involvement in the predicate offence or has little or no knowledge on the predicate offence” fitted Mr Li, a money laundering stooge.

56.  Ms Wong conceded that the use of stooge accounts for money laundering remained prevalent in the first 7 months of 2026; however, both the number of stooges arrested and the amount of proceeds going through stooge accounts have been on the decline from their respective peaks in 2023 and 2024.

57.  The recent statistics indicate a gradual downward trend of prevalence for money laundering through bank accounts opened by “ML Stooges”.  Given the state of the statistics, Ms Wong urged the court to consider a 20% to 25% enhancement range as being sufficient and proportionate to serve as an extra deterrence to Mr Li and like-minded offenders.

58.  On the principle of totality, Ms Wong submitted that the four charges involved the same modus operandi and overlapping time frames.

59.  Taking into account the close proximity in time, Ms Wong invites the court to adopt wholly or partially concurrent sentences so that the sentence after enhancement would be a fair and balanced global sentence.

60.  During his remand, Mr Li has engaged in deep reflection.  He fully acknowledges his wrongdoing and expresses regret and sincere remorse.  He is determined to rehabilitate himself and turn over a new leaf by not reoffending.

61.  Upon release, he plans to seek social worker’s assistance, and will proactively seek for a lorry driver job to support his law-abiding lifestyle.

62.  Ms Wong asks for a lenient sentence for Mr Li so he may soon re-integrate into society. 

Sentence

63.  I take on board all that has been said by Ms Wong on behalf of Mr Li.

64.  I will adopt a global approach and fix a global starting point for the whole case.  The total amount laundered came to an astronomical figure exceeding HK$469 million spread over a period of about 12 months.  There were a total of about 106 deposits[2] and about 17 withdrawals[3].  I note that out of the total amount laundered, HK$170 million (about 36%)  had an international dimension.

65.  Bearing all these in mind, and paying particular attention to the limited role of Mr Li, I adopt a global starting point of 5 years 6 months’ imprisonment.

66.  Mr Li pleaded guilty to the offences in good time.  He is entitled to the customary 1/3 sentencing discount.  There are no other mitigating factors of weight to justify another sentence reduction.

67.  Prosecution asked for enhancement of sentence under OSCO, Cap 455, on two bases, namely, (i)  prevalence of money laundering offences; and (ii)  the nature and extent of any harm, whether direct or indirect, caused to the community by recent occurrences of money laundering offences.

68.  For the purpose of showing the two bases, prosecution has, without objection from Ms Wong, submitted the witness statement of CIP Li Yiu Nam dated 24 August 2026 (“the Statement”).

69.  Ms Wong does not object to the enhancement of sentence but asked that the scope be capped at 25%.

70.  According to Table A on page 5 of the Statement, the total number of stooges to be arrested (ie those who assisted in money laundering activities many of whom had sold their accounts at financial institutions)  in the whole of 2026 (by extrapolation)  will stand at 6,336.  This compares with the corresponding historical figure of 5,335 in 2025.  It represents an unenviable increase of 18.8%.

71.  I am satisfied the use of stooges in money laundering activities and by implication the money laundering offence itself (even if only suspected)  is still prevalent.

72.  According to Table B on pages 6 and 7 of the Statement, the expected amount of reported monetary losses (including from overseas victims)  and of proceeds laundered locally both involving local stooge accounts in the whole of 2026 (by extrapolation)  will come to $2,445.63M.  This when compared with the corresponding historical figure in 2025 of $3,933.14M represents a drop of 37.8%.  Although a significant drop, the absolute figure for 2026 is still huge for all intents and purposes.

73.  However, the harm to the community is not limited to reported losses to local victims.

74.  According to para 18 of the Statement, the anti-money laundering regime in Hong Kong is hampered by the prevalence of stooges for money laundering activities in the following ways:-

(a)  The prevalence of stooge accounts (“PSA”)  interferes with the normal operation of the banking system, having a negative effect on the reputation of Hong Kong as a well-known international financial hub;

(b)  PSA forms multiple layers of “shields” concealing the identity of the masterminds behind, making it difficult, if not impossible, for police to identify the masterminds behind;

(c)  PSA substantially facilitates the commission of crimes and in turn leads to more crimes being committed, as the masterminds could easily get away from their criminal liability;

(d)  PSA makes money laundering easier, which allows culprits to make use of their ill-gotten gains to extend their sphere to engage in a wider range of illegal activities;

(e)  PSA means that law enforcement agencies have to put in more investigation efforts and resources; and

(f)  People with low income or less awareness of the consequences of selling their bank accounts are more likely to be lured by the culprits to take the risks of commission of crimes to surrender their accounts for monetary reward.

75.  From the figures I recited above from Table B, and from what PSA can do to the community, I am satisfied that the harm to the community by recent occurrences of money laundering offences is still substantial.

76.  I am of the view that the two bases upon which the prosecution relies for seeking sentence enhancement have been made out.  I rule that my power to enhance sentence under section 27(11)  of OSCO, Cap 455, is engaged; and I hereby invoke that power.

77.  Regarding the extent of enhancement, I adjudge a 25% enhancement to be sufficient to act as an additional deterrence against Mr Li and like-minded persons.

78.  I will impose individual enhanced sentences for all charges and make an appropriate order to arrive at the final global sentence.

79.  As an act of mercy, I will ignore the decimal places in the calculation of the sentences in terms of months.

(Mr Li, please stand)

80.  For Charge 1, the sentence is 51 months’ imprisonment.

81.  For Charge 2, the sentence is 51 months’ imprisonment.

82.  For Charge 3, the sentence is 30 months’ imprisonment.

83.  For Charge 4, the sentence is 42 months’ imprisonment.

84.  I order that 2 months of the sentence on Charge 2, one month of the sentence on Charge 3, and one month of the sentence on Charge 4, are to run consecutively among themselves, and to run consecutively to the sentence on Charge 1, making a total sentence for Mr Li of 55 months’ imprisonment.